PZ Cussons Nigeria gains revenue, multiplies profit to N6.4bn in 2022

PZ Cussons Nigeria Plc reaped major gains on the side of earnings that multiplied group profit roughly four times to N6.4 billion in its 2022 financial year ended May. This is a sustained upswing for the second year for the consumer goods manufacturing and marketing company from a loss of over N7 billion in its 2020 financial year.

The company’s unaudited full year earnings report for the financial year shows a 278 percent upsurge in the bottom line from about N1.7 billion at the end of its 2021 financial year.

The biggest inflow that led the profit advance is other income, which was driven by an apparent windfall from profit realised from fixed asset disposal, amounting to N5.7 billion. The income towers a clear 174 percent above the corresponding figure in the preceding financial year. It also beats the operating income of N3 billion the company generated for the year.

This is a repeat of the preceding year’s record when other income equally advanced by over 1000 percent from N179 million to over N2 billion.

The second major revenue upturn came from interest earnings that rose by more than three and half times to about N840 million with one-half of it generated in the final quarter.

The third angle to the elevated revenue performance the company put up in the year is group sales revenue that grew by 21 percent to over N100 billion. This is a stable growth record in sales for the company from an increase of 23 percent recorded in the preceding financial year.

It is also a sustaining change of direction from a two-year drop in turnover at the end of the 2020 financial year. The gains in sales over the past two years are the best records the company has achieved in group sales performance in many years.

PZ Cussons’ revenue is derived from sales of a wide range of consumer products and home appliances. These include detergent, soap, cosmetics, refrigerators, air conditioners among others.

The challenge for the company however is that cost of sales grew ahead of turnover at over 27 percent to nearly N76 billion for the year. This left no room to convert the revenue gains into gross profit. Of an increase of N17.5 billion in sales revenue in the year, only slightly over N1 billion was added to gross profit.

Cost of sales claimed an increased proportion of sales at 76 percent in 2022 compared to 72 percent in the prior financial year. Gross profit improved only moderately at 5 percent to N24 billion, a sharp slowdown from 170 percent leap in the preceding year.

Exchange loss remained huge for the company at over N4 billion for the year though lower than almost N6 billion incurred in 2021. With increases in operating expenses, the company closed the year with an operating profit of N3 billion. That represents an increase of 158 percent over the preceding year’s figure of below N1.2 billion.

The robust increases in other income and interest earnings reinforced operating profit and powered the bottom line for the year.

PZ Cussons is reaping the advantage of a virtually debt-free balance sheet with a drop in its already insignificant finance expenses from over N71 million to N11 million. That boosted the finance income further with net finance income up almost five times to over N828 million.

This is a further improvement from a drop of 84 percent in finance cost in 2021, which enabled the company to shift from a net finance cost to a net finance income status at the end of that year.

The company earned N1.61 per share for the 2022 financial year, a sustaining improvement from 37 kobo per share in 2021 and a loss per share of N1.82 in the 2020 financial year.